A new fine wine index developed by a researcher at Stellenbosch University (SU) will provide a benchmark for investors interested in wine as an alternative asset.
This was according to Dr Mesias Alfeus, lecturer at SU’s department of statistics and actuarial sciences. Alfeus researched the investment potential of wine, as well as the potential of fine wine as a reliable investment.
The SAFW10 index, which was developed during his research, was first showcased on 5 August at a colloquium hosted by the National Institute of Theoretical and Computational Sciences (NITheCS) on SU’s campus.
This was according to Dr Francesco Petruccione, director of the NITheCS.
Dr Mesias Alfeus, a lecturer at Stellenbosch University’s (SU) department of statistics and actuarial sciences, recently presented his research on the creation of the first-ever South African fine wine index. PHOTO: Kara le Roux
The significance of a new index
The SAFW10 index could boost capital flow into the South African wine industry, Alfeus said.
Alfeus, who is also a principal investigator for the NITheCS’s quantitative finance research program, said that the index bridges finance, economics and the wine industry.
“Fine wine assets have grown in value by 147% over the past decade, outperforming many other luxury assets,” said Alfeus.
The South African wine industry employs nearly 270 000 people and contributed R55 million to the South African economy, according to a report on the 2022/23 harvesting season by Wines of South Africa published in May 2023.
The top 10 fine wines listed in the SAFW10 index were selected based on the volume of their trade and monetary value, said Dr Mesias Alfeus, lecturer at Stellenbosch University’s department of statistics and actuarial sciences. Another criterion for their selection was focused on the ratings by acclaimed wine critic and wine journalist Tim Atkin, said Alfeus. GRAPHIC: Kara le Roux
Data collection
The index lists the top 10 South African fine wines based on their liquidity and their value, said Alfeus.
“This selection offers a comprehensive picture of the fine wine market,” said Alfeus, who said that a specialised index was needed for the South African market due to relatively lower prices.
Data from 2018 to 2023 was gathered from Wine Cellar, a Cape Town-based wine merchant, and Strauss & Co Fine Wine Auctions, according to Alfeus.
“It’s a catchy topic. It’s something interesting you know,” said Dr Francesco Petruccione, director of National Institute of Theoretical and Computational Sciences, referring to the SAFW10 index that tracks the performance of the 10 best wines in South Africa. PHOTO: Kara le Roux
‘Impactful science’
Petruccione emphasised how Alfeus’s research aligns with NITheCS’s goals; addressing real-world challenges through innovative solutions.
“One of our mandates from the Department of Science and Innovation is to do impactful science, and [Alfeus’ research] aligns with it perfectly,” Petruccione said.
Currently, the index is privately published through Strauss & Co, but Alfeus plans to make it publicly available.
“It was fun to learn that some of my favourite wines, like the Meerlust Rubicon, were part of the top 10,” said Eva-Liisa Andima, a colleague and friend of Alfeus who attended the colloquium.